In the October 2 Federal Register, the Internal Revenue Service published Temporary Regulations (full text) implementing the new Federal Scholarship Tax Credit. This credit provision allows taxpayers in states that have elected to participate in the program a credit (up to $1700) for contributions to scholarship granting organizations that award scholarships to elementary and high school students in public, private or religious schools. The tax credit was enacted last year as part of the One, Big Beautiful Bill Act and applies to contributions made beginning in 2027. The IRS also published identical Proposed Final Rules in the Federal Register.
Qualified scholarship organizations, as defined by Internal Revenue Code 25F are non-profit organizations that provide scholarships to 10 or more students who do not all attend the same school. The organization must be included on a state’s list of scholarship organizations that meet the Internal Revenue Code’s requirements.
Politico reports on the new Regulations. Ed Choice has additional details.